Long-term mortgage interest rates slid back down in the latest week, according to mortgage giant Freddie Mac, matching their lowest level year-to-date.
The Freddie Mac Primary Mortgage Market Survey found that the average rate on a 30-year fixed rate mortgage (FRM) slipped to 4.12 percent, excluding points during the week ended July 3, 2014, down from 4.14 percent. That ties with the lowest rate this year from just over a month ago during the week of May 29. Last year at this time, the average rate was actually higher at 4.29 percent.
The rate on a 15-year FRM was unchanged at 3.22 percent from the week before, but is down from 3.39 percent a year ago. The one-year adjustable rate mortgage (ARM) carried an average rate of 2.98 percent, a decrease from 2.40 percent the previous week and down from 2.66 percent a year earlier.
Freddie Mac vice president and chief economist Frank Nothaft saw this week’s rates as a boon to homebuyers. “Mortgage rates were little changed from the previous week and remain below levels seen the same time last year, which should provide some help with home buyer affordability in many markets,”he commented in a press release. “Recent housing data was better with pending home sales up 6.1 percent in May and overall construction spending showing a slight improvement with private residential spending now up 7.5 percent on yearly basis.”
The lower rates have not translated into major changes in mortgage applications. The Mortgage Bankers Association’s index of mortgage application volume fell 0.2 percent in the latest week. Refinance applications rose 0.1 percent while home purchase requests dropped 0.7 percent.
The National Association of Realtors says that the overall trend of lower rates is helping the housing market though. The NAR’s measure of pending home rose significantly in May by 6.1 percent. Still lower rates may not be able to give the market enough momentum in 2014.
“Sales should exceed an annual pace of five million homes in some of the upcoming months behind favorable mortgage rates, more inventory and improved job creation,” said NAR chief economist Lawrence Yun in a statement. “However, second-half sales growth won’t be enough to compensate for the sluggish first quarter and will likely fall below last year’s total.”